Top-5 Stocks of Biotech Companies

Shares of the companies from the biotechnology sector have dropped over this year, with their decline continuing further, following the strain of the newest Covid-19 variant, Omicron. Nevertheless, the shares of Amicus Therapeutics, Absci, Shattuck Labs, Deciphera Pharmaceuticals, and ImmunoGen may start growing fast depending on the test results and successful development of the drugs they are manufacturing.

Lets' explore these top-5 companies from the biotech sector:

1. Amicus Therapeutics

This biotech company was founded in 2002. Its headquarters are in Philadelphia, Pennsylvania. It manufactures drugs for the treatment of rare metabolic diseases.

On 11 February 2021, the company announced that AT-GAA – the experimental two-component therapy for Pompe disease – had not reached its goal in the late stage of the tests.

The shares of Amicus Therapeutics Inc (NASDAQ: FOLD) reacted to this statement by falling 32.89% to $12.57; and the share price has reduced 54% since January 2021.

On 3 December 2021, the European Medicines Agency (EMA) confirmed the application for the registration certificate for AT-GAA. Investors were not impressed, and the quotations of Amicus Therapeutics responded with a decline of 6.11% to $10.45.

However, if the Food and Drug Administration (FDA) and EMA approve the use of AT-GAA for the treatment of Pompe disease, the shares of Amicus Therapeutics have all the chances to rise.

2. Absci

The company uses artificial intelligence and synthetic biology to create and manufacture drugs. Absci has patented its technological and methodological platform, Integrated Drug Creation.

Absci Corporation (NASDAQ: ABSI) became public in July 2021, and the shares leaped up 41% to $30.29 already a fortnight after the IPO. However, they slumped into a lengthy decline soon after, losing 66% by early December.

On 9 November 2021, the biotech company reported its Q3 2021performance. The July-September revenue has disappointed investors and Wall Street experts, with Absci shares dropping 21.08% to $14.23 as a result.

A hedge fund that invests in healthcare – Redmile Group – has bought 8 million shares of the corporation for $93.4 million. A total of twelve hedge funds are holders of Absci shares worth $251 million. This means that the company looks attractive to investors, and the outlook for seeing growth in the quotations is good.

3. Shattuck Labs

This biotech company is a pioneer in designing bifunctional hybrid proteins of a new generation for the efficient treatment of cancer and autoimmune diseases.

Shattuck Labs was founded in 2016. It has created the Agonist Redirected Checkpoint platform (ARC) for developing therapeutic drugs featuring several immune functions.

Since the beginning of 2021, the shares of Shattuck Labs, Inc (NASDAQ: STTK) have been stably declining. Since January 2021, they have lost 83%, falling from $52.41 to $8.67.

On 2 December 2021, it was announced that Shattuck Labs representatives would be attending the second annual TIGIT Therapies Digital Summit from 7 - 9 December 2021. This information resulted in the shares growing 7% to $9.

With the Phase 1 dose-escalation data relating to the new proteins SL-172154 and SL-279252 already available, it's quite probable that Shattuck Labs shares will recover.

4. Deciphera Pharmaceuticals

This biopharma company was founded by Daniel L. Flynn in 2003. The company headquarters are in Waltham, Massachusetts, and its research centre is in Lawrence, Kansas.

Deciphera Pharmaceuticals specialises in creating and manufacturing innovative drugs for cancer treatment.

Since January 2021, the stock of Deciphera Pharmaceuticals, Inc (NASDAQ: DCPH) lost 86%, falling from $57.07 to $8.03. The shares saw a particularly strong decline on 5 November 2021, falling 75.5% to $8.82 overnight.

The shares dropped after it became known that Ripretinib – a drug meant for treating gastrointestinal tumours – had not managed to reach positive results in the third stage of tests.

Consequently, the shares of Deciphera Pharmaceuticals – a promising and actively developing company – currently cost less than their IPO price, thereby giving investors a chance to buy an underpriced asset.

5. ImmunoGen

ImmunoGen was registered in 1981 and became public eight years later. This biotech company designs and manufactures new-generation cancer treatments.

Out of the top-5 biotech companies, ImmunoGen is the only one to demonstrate positive dynamics in 2021 – since January, its shares have grown almost 4%.

On 30 November 2021, the company reported that Mirvetuximab – a new drug for fighting ovarian cancer – produced a positive result in stage three of tests. In the future, Mirvetuximab could become the base for drugs against other types of cancer.

The placement of 11.6 million ordinary shares at $6.6 each was announced on the same day. Up to 27.4 million shares could be bought at $6.59 each. Both news made ImmunoGen, Inc (NASDAQ: IMGN) shares grow 29.89% to $6.17.

The management of ImmunoGen expects the FDA to approve the use of Mirvetuximab to treat ovarian cancer as soon as Q1 2022. When this happens, the shares of the company may sprout.

A decline in biotechnology stock does not mean that biotech companies should be ignored

Admittedly, currently, investors are more attracted to the biotechnology stock of companies that are working on treating COVID-19. However, it is worthwhile noting that other companies in the biotech sector that are developing treatments for cancer, autoimmune, metabolic diseases, etc. can also bring good profit; hence their shares are in demand too.

From this niche, the companies we spoke about above are the most profitable ones, namely: Amicus Therapeutics, Absci, Shattuck Labs, Deciphera Pharmaceuticals, and ImmunoGen.

Over the course of 2021, almost all of them have lost some of the stock price, which means that assets now are underpriced. Although, you should keep in mind that the forecasted growth is just a forecast, and not a fact – so always be aware of the risks involved.

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